BL Research Bureau

The rupee (INR) has begun today’s session on a flat note at 74.83 against the dollar (USD). A lack of trend is visible in the currency pair USDINR since the beginning of the week, where it has been oscillating between 74.7 and 74.9. Until the exchange rate remains within these levels, the next price swing will remain uncertain.

In case if the currency pair rallies above 74.7, the rupee is likely to face a stiff resistance at 74.5. A breakout of this level can result in a considerable uptrend with the immediate hurdle at 74.35. On the other hand, if the rupee depreciates from the current level and breaches 74.9, there is significant support at 75. A break below 75 can switch the trend to downward.

Compared to last week, the activities by foreign investors seem relatively lesser. On Tuesday, the net inflow of the Foreign Portfolio Investors (FPI) was recorded at ₹245 crore (equity and debt combined).

Dollar index:

After declining for multiple sessions in a row, the dollar index posted a marginal gain yesterday. However, the price action suggests that the recovery could only be temporary, and the index is likely to resume its downward trajectory. It is currently trading at 93.6 and notably, the two-year low which was registered on Monday is at 93.48. It can be expected to make fresh lows today. The dollar weakness can help the Indian currency.

Trade strategy:

Though the local currency is range-bound, until it stays above the support of 75, it is advantage rupee. Looking at the range, the nearest hurdle is at 74.7. Hence, traders can buy INR with tight stop-loss if it breaks out of 74.7.

Supports: 74.9 and 75

Resistances: 74.7 and 74.5

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